← The Wolf Of All Streets
The Wolf Of All Streets
Bitcoin Hits $100K Again! How High Can It Go? | Crypto Town Hall
00:48:38
Bitcoin Hits $100K Again! How High Can It Go? | Crypto Town Hall
Loading summary
Transcript88 lines
- [00:01]
Scott
Good morning, everybody. Happy Thursday. Welcome to our amazing panel of seemingly regulars. It's like a job for you guys at this point. Fall as Dan Lawyer Zach. We've got on stage, obviously others joining. We have the ghost of Mario Knoffle and we have the idea of Rand Nooner. Both, both. We're lucky to have them. It's like the ghost of Christmas Past and the ghost of Christmas future. And I'm just a ghost of Christmas present if that's a thing that's here by myself on a daily basis. But that's good for me because I get to talk to these incredibly intelligent people about what's happening in the market. Of course, we have bitcoin currently sitting once again above $101,000. Two days ago it was, we're going back to 74,000, 75,000. It's over. We're dead because price is at 94,000 and now we're at 101,000 and our titles get to be. How high can it go? Probably like 240,000 by tomorrow if we get the right analysts on stage. But I think important to remember that Bitcoin around $100,000 is really, really, really good and more than probably most really hoped for if they're being honest with themselves at this point in the cycle. Just exceptional to see bitcoin sitting where it is In December of 2024, I think leading to a lot of people believing that the 2025 part of the bull market will be the parabolic point in the cycle fullest. Maybe since you're here, you're an analyst to take a look quickly at the chart and what you're seeing.
- [01:36]
Dan
Yeah. Hey, Scott, I think you hit the nail on the head there. It's. It's amazing to think how much FUD was in the market, how much negative sentiment there was on. On X. Just a couple of days ago you'd swear that BTC had gone back to, you know, the 60, 70K range that it was in for most of this year. But in fact it was still hovering around 93, 94K. Alts got a massive flush. But I actually think that's extremely bullish looking into next year. We saw this massive OI wipe on bitcoin last week where it quickly wicked down to something like 90.4 or 90.5 K. It was a huge liquidation event. I think was the biggest BTC liquidation event since 2021. Lots of open interest wiped, lots of traders knocked out of their positions. But altcoins didn't really flinch and a lot of guys were saying, well, we need alts to do the same before they can start going parabolic, before they can start their proper run. Looking into the rest of December, looking into Q1, I was actually pretty skeptical about that. I was thinking, oh, maybe they don't. And lo and behold, a few days later, we got a big alt wipe. Lots of alts went minus 30%, minus 25% in a day that was sustained selling over basically 48 hours. It was pretty brutal. Another huge liquidation event. But now that we've had those, now that we've had this kind of seasonal early December, mid December dip, things are just looking so hot coming into the end of the month, coming into Q1, right, we have this kind of typical early December, mid December dip, which is sometimes followed by a Santa rally or end of month rally, whatever you want to call it, into Q1, we saw the very same thing. Last bull run, there was a. There was a dip around December followed by a rally into January, February, we saw the same thing, kind of the start of this bull run right back in 2022, leading into 2023, there was that kind of final dip around 15 or 16k. I can't remember what it was followed by. Basically BTC ripping, starting kind of end of December, January. So I mean, things, in my opinion, things have never looked better. We have Trump literally in the trenches buying Link, buying aeve, buying Ethereum, which is wild, the future president of the usa, buying altcoins, buying our bags, buying our capitulations. So things are looking really positive. I'm in a ton of positions now. Some are red, some are green, some are around break even, but I'm not looking to touch those probably for another few months because I think everything just trades higher. Sometime in the next few months, I think we're going to get a pretty crazy run into Q1, Q2, and I'm kind of putting my money where my mouth is on that one.
- [04:27]
Scott
I tend to agree with you entirely. I mean, it's hard not to have a title that's about $100,000 bitcoin every day. But obviously there are other things going on and maybe we should speak more fundamentally than dig down into the nuance of price action today. A few of the sort of bigger stories obviously is Brian Quinten could potentially be the chairman of the cftc. He was CFTC before. He's extremely pro crypto. Actually works with Andreessen Horowitz. Now on the crypto side would be massively bullish. I don't know if people Saw. But there was a story, I think, in Bloomberg today about Paul Atkins will be the chairman of the sec. I mean, you couldn't get somebody more fundamentally different than Gary Gensler. He basically, at the time it came out, had blamed the United States government effectively for the FTX collapse, the lack of regulation, the last lack of friendly regulation in the United States, allowing companies to work, pushing them offshore and allowing for this fraud. I mean, the guy, when you listen to his statements, Paul Atkins really sounds like one of us. What we were saying on these spaces for all those years, the idea that someone like that will be heading the SEC and we could have someone like Brian Quinten's at the CFTC is astounding. Also, Trump rang the bell this morning at the stock exchange, and of all people, they had Jim Cramer interview him live. But he asked him actually kind of superficially about the bitcoin reserve. And Trump was pretty much saying that's going to happen, in his view, one way or another, and that, you know, we're going to once again, you know, make a. Make a crypto great again in America. So many fundamentally insanely bullish things happening for the bitcoin space in the United States. It's hard to look at a chart and get particularly bearish. I mean, Zach, your opinion, obviously. I mean, as a lawyer, you've been dealing with, we've talked about it many times. You've been dealing with, like, clients who had no kind of clarity, really no hope for operating in the United States. Very hard to give them any direction without that clarity. I mean, how hopeful for you, as you see pick after pick after pick that are pro crypto and obviously legislators talking about it, that this situation will dramatically improve as much as we sort of anticipate.
- [06:40]
Zach
Yeah.
- [06:41]
Justin
I mean, it's incredible whiplash.
- [06:43]
Scott
Right.
- [06:43]
Justin
And I think you have to basically price these things differently. The first is just getting rid of an administration that's hostile to crypto, not just in terms of regulatory clarity around securities law, but also a CFTC that is looking for personal liability against members of daos because they're holding or voting the dao token. Right. My clients and myself, actually, with our escrow account being debanked in my case, not because I run a crypto company, but because there's the word crypto in my website because we serve some crypto clients, Right. That's going, right. The bitcoin ETF being approved with just this incredibly sour, salty statement from Gary Gensler signaling, listen, this is a bad thing. Don't invest in it. And so all of that going away is incredibly bullish and optimistic. Even if we don't ask, all right, who's replacing them? And then you put on top of that, right, the reporting, we're seeing that Donald Trump is going to look at the bitcoin price like he looks at the S&P 500 as an indicator of how well he's doing on the economy. You know, never mind whether that's. That's a good idea or not. But that's such an incredible shift, right, that this is going to be a metric the government is looking at, that they're trying to create pro crypto and pro bitcoin legislation. We might get an svr. We're likely to get a market structure bill. Even if we don't, the SEC is probably going to start doing no action letters. They're probably going to put out actual guidance about where they think the line is. We'll probably see some sort of safe harbor for people who want to launch tokens. It's just, you know, look, we don't know what that part is going to mean yet. My sense is that the absence of the bad news from the Biden administration is probably priced into some point, but the potential good news to come is not priced in. And I'm excited to see what happens next year.
- [08:27]
Lawyer
Yeah, I agree with all of that. I mean, I don't have math to support my, My, my gut feelings, but almost in the same way as when bitcoin was like $25,000 and I was telling people, look like, you got to buy this. I feel like we're kind of like that with altcoins. I don't have a particular one to say, but it's like, okay, so you guys, we all have an understanding of the space. We been staring at these tokens for years now. They're kind of pumping because other people are coming. But you are still way better positioned to buy these things now and figure out which are the best ones over time. Like, it seems to me like whether bitcoin pumps further or even takes a breather, even a breather puts a lot of energy into altcoins. And if you have the perspective now of, like, being in, you know, early Internet, but actually being in the game and knowing which projects might survive, I mean, now's the time to deploy some capital into altcoins, I think.
- [09:23]
Scott
Justin.
- [09:24]
Mario
Yeah, thanks. I'd like to echo that, actually. I mean, bitcoin can't actually do anything. So, like, from my perspective, the altcoins is really where the cryptocurrency revolution is at. If we actually want to change the world, if we actually want to build applications, if we actually want to get users, if we actually want to have self custody, then we have to do this through altcoins. We can't do it through bitcoin. Bitcoin is just not capable of it. So I think for that reason, yeah, I think this is a huge opportunity. If you think bitcoin going from 100k to 200k is a big opportunity, try to think about what an altcoin can do when it flips bitcoin. I just want to put that out there because as you know, I think bitcoin is nonsense.
- [10:10]
Justin
I would say the other just to push back on that. Right. I think if you're looking at the risk reward right now, Bitcoin I think fundamentally has product market fit as digital gold and we're seeing sort of for the first time broad acceptance of that from big institutions and from government. And at least to me there seems like a really clear opportunity for increased adoption of Bitcoin as a store of value. I think there is a perhaps higher risk, higher reward opportunity with alts. Insofar as you know what we were all just talking about, the government is going to turn here and allow crypto companies, crypto startups, to innovate in a way they have not allowed before. But no crypto startup that I'm aware of, no crypto product has found real product market fit outside of just speculating on token price. Stablecoins, stablecoins, sorry, with the exception of.
- [10:57]
Scott
Stablecoins 200 billion, they've had passed a 200 billion total market cap.
- [11:01]
Justin
Agree, but there's not a really straightforward way to invest in stablecoins and there's not like one blockchain that all the stable coins are. So like, look, maybe, maybe with new regulations like RWA will become a real thing. Web3 will become a real thing. Like I wouldn't write off the possibility of that. But A, you're taking on the risk if you're investing in altcoins. Like that needs to happen for altcoins to fully play out in the way that you know this to be a similar bet to the early Internet. And then B, you also need to be right about who is the beneficiary of that playing out, whether it's a particular blockchain network, maybe it's, you know, some of the stuff goes on private blockchains managed by traditional finance. Like I just think there are those two big uncertainties about is this actually going to happen. Are we going to find product market fit and then who is the winner going to be in that world? And that doesn't exist with bitcoin.
- [11:48]
Mario
No, no, I mean, you're right. It's. It's much. It is very risky. It's very difficult. I agree. But the, for me, the risk of investing in Emperor that wears no clothes is far greater. For me, the risk of investing in a network that I know is going to collapse within X amount of time, I think is far worse. And I find it such a funny thing to say product market F if the product in your view is just speculation, like it's a bit of a perversion of language. No, like speculation is not a use case. It's perverting the meaning of these words.
- [12:21]
Justin
I guess it depends what you mean by speculation.
- [12:23]
Scott
Right.
- [12:24]
Justin
Like, I think bitcoin today has the attributes that make it a good store of value. We're not speculating on whether that will happen in the future that has come to pass. We are speculating that more people will recognize that and adopt it. But I would call that investment more than I would call it speculation. Whereas if I were to look at altcoins, I think that really is genuinely speculation that some of these consumer use cases or business use cases will play out and speculation that a particular blockchain is going to be the beneficiary of that.
- [12:51]
Mario
It just fundamentally, bitcoin doesn't have the qualities to make it a good store of value and a good money over the long run. And I think the market will realize that.
- [13:01]
Justin
Maybe your thesis on this, why is it you think bitcoin is going to collapse and doesn't have the store value characteristics you need?
- [13:06]
Mario
Well, the long term, the security budget is unsustainable, of course. Right. So I think that the security budget will run out which will then force a inflation increase to occur, say between four to 12 years from now.
- [13:18]
Justin
So that to me sounds like. So today the security budget, I think you'd probably agree, is many multiples of what we actually need to secure bitcoin. Right. There's plenty. Given the current sort of block reward, that there's plenty. So you're speculating in the future that as bitcoin is adopted, the fee market will not develop, that the transactions on the bitcoin blockchain will not have sufficient demand in order to fill up that gap as the block reward halves every four years.
- [13:41]
Scott
I mean, maybe, but.
- [13:42]
Justin
But you know, I would take the other side of that. I think if bitcoin is going to be Important as digital gold, people are going to move it around to settle transactions. I think it's inevitable that that fee market will develop. But you know, the ultimate speculation is to like have a firm view that it won't.
- [13:59]
Mario
But it doesn't have enough capacity to for settling transactions, right. At seven transactions per second, it can't be used a settlement network, it can't be used for mass self cust. It's, it's pretty wild.
- [14:11]
Justin
If you think it has capacity problems, that's very bullish for fees. I don't think you can have both of these things in your head that the throughput is not enough and that the fee market won't develop.
- [14:18]
Scott
Like it's got to be one or the other, right?
- [14:20]
Mario
But we hit the limit like what was it like eight years ago or something. And what we've observed actually happens is that fees, sometimes a use case on Bitcoin takes off where there's some sort of spike in usage and then you see a fee spike, right? And when a fee spike happens, what's effectively happening is it's pricing out everyone else because capacity doesn't increase when fees go up. So fee spike happens, people leave, fees go back down. So this is just a repetitive pattern that we've seen throughout Bitcoin's entire history. Fee spike, go back down, fee spike, go back down. It has to be a sustained high fee for a ticket.
- [14:54]
Justin
Capacity of Bitcoin as a settlement layer, right? For a store value asset is a function of the bitcoin price, it's a function of liquidity, right? It's how much value can you move at any given time. And Bitcoin in that regard has so much more capacity. If you need to move $10 billion, you're not doing it on Tron, right? You're, you're doing it on, on Bitcoin.
- [15:14]
Mario
Sure, sure. I'm.
- [15:15]
Justin
People use it for settlement in that way. And that seems to be the use case that is currently being adopted for Bitcoin, right? Is as a store of value. Asset like that to me says that like if this thing continues on this trend, fees will develop because people will want to settle large amounts of value on the bitcoin network because it's so much more secure and it's so much a better store of value than these, these altcoins, right.
- [15:37]
Mario
But it hasn't happened, right? And today security is lower if you measure it by the block reward is lower than it was five years ago. And it's going dollar terms higher than it's ever been.
- [15:47]
Justin
And the hash rate is at an all time high today. The security budget for Bitcoin is literally the highest it's ever been.
- [15:53]
Mario
You're measuring it wrong. You can't measure the security budget of Bitcoin by looking at the hash rate. You actually need to look at the security budget, how much the miners are being paid.
- [16:01]
Justin
Fine. The a hash rate per value in Bitcoin must be near all time highs because the hash rate is at an all time high. So, so is the price. But the idea like I didn't understand you to be making the claim that we have any worry about today's security budget.
- [16:19]
Mario
No, agreed. I mean, I mean bitcoin security today is high, right? Bitcoin is the biggest cryptocurrency and it's probably going to go up in price. Look, I'm not going to deny that I'm not, I'm not stupid. But I still see it as a type of mass collective delusion because I'm convinced that fees won't be able to be sust. That this is even an open question. I think is unacceptable for something that should be considered a store of value. Its capacity won't even support like what we're talking, what you're talking about here like settlement networks exceed 10 TPS and that's not including all the other potential usage. I mean that could lead to. There's this several potential death spiral scenarios and bank run scenarios here. Anyway, I've taken enough air time. I know this is an unpopular opinion but. But I very much appreciate you hearing this out and, and, and maybe adding a bit of caution to the wins as well because not every. Daisy.
- [17:11]
Scott
Yeah, Dan then. Lawyer.
- [17:12]
Knoffle
Yeah. Hey guys. Hey. Yeah, I think last this year or last year was the first time that we saw the transaction fees actually being higher than the block reward during the ordinals and runes. And people have their opinions about ordinals and runes. Some people like them, some people don't. But it was the first time that we saw that the transaction fees were actually in bitcoin terms than the block rewards. I obviously disagree with Justin. I don't think the security budget is an issue if you're doing in dollar terms. As you know, as Zack was saying, it's higher now than it was or has ever been. I just don't see an issue. I think the bitcoin price goes up and that means that the reduction in Bitcoin is offset by the increase in price. You get a higher dollar budget. And also as we saw fees did come up with that. Yes, the network got more congested, but not as congested as it was six, seven years ago when it really kind of was very, very congested. But ordinals and runes are potentially a way of fixing that security budget by increasing transaction fees.
- [18:25]
Lawyer
Yeah, I just want to go back to an earlier point, which is we were talking about which altcoins to buy and how, you know, stable coins are so much of the activity. I mean, don't you think, and this is a sincere question, don't you think you can look at that activity and say, okay, you know, 25% of that activity is happening on Tron, between Tron and BSC, it's maybe that's closer to 40 or 50%, I think. Like, don't you think that's a factor that alone could tell you maybe those are something to show interest in?
- [18:53]
Justin
No, I mean, I think, I think the big elephant in the room here is the stablecoin legislation. I think that is likely to be the first comprehensive legislation we get regarding crypto. We'll see what the rules are going to be. I think the dynamics, you know, around stablecoins, including with stablecoin issuers. Right. The big news, maybe we haven't talked about yet is drawn, sorry. USDC is being added in a big way to Binance. They did a strategic partnership. Tether is being delisted from Coinbase. That probably affects, for example, how popular Tron is going to be compared to other networks. Tron is, does not have USDC at the moment. They are the big mover of tether. It could be that after we get regulatory clarity about stablecoins, the big traditional financial players are going to get into this. We might have JP Morgan USD, right? We might have blackrock USD. So I don't think we know at this point, like I think we know that. I agree with Scott. Stablecoins do have product market fit. People are going to use private stablecoins. I think that's a very good bet. But what that's going to look like in the future I think is pretty speculative.
- [19:54]
Lawyer
But if people are on Tron using stablecoins, doesn't that at least indicate that if we do find something else with product market fit, some of those users are at least that's one of the blockchains they'll. They'll use.
- [20:06]
Justin
To me, to me, the fact people use stablecoins on Tron say that people like low fees. People don't like paying large fees to move around stable coins.
- [20:13]
Scott
Low fees, low fees and speed. And there's a flywheel of, you Know people in countries that are largely adopting Tron just saying to their friend, hey, I need to send you 10 bucks. Get this thing, get this wallet, download this app. I'm gonna send you 10 bucks. And I can guarantee 99% of those people have no idea it's on Tron.
- [20:30]
Lawyer
Well, that's the network adoption that. I mean, like, once you have that network, then it's easier to roll things out there. And it just, I just mean that it's relevant. I don't mean that you can do math on it. I just mean that it seems to be an indicator, but maybe not. That's why it was genuine question.
- [20:45]
Scott
Right, Justin?
- [20:46]
Mario
Yeah. As a, as a value investor, for me, I think usage is one of the most important indicators. Actually that's one of the things I look at every day and it's something we very much keep up to date with. So if a blockchain really has significant usage and has growing adoption, that's not something I can ignore. As an investor, especially as a value investor, I think that's very interesting. And today, obviously, and you're right in pointing out Tron, it's like a really surprising cryptocurrency. It's not anyone would have really expected that, but it's being used really for remittances. Tron is a little bit too centralized for my tastes and not too innovative, but it definitely has some real adoption going there. And I think they're doing a lot of good in the world, paradoxically, for that reason, obviously the big leader in usage right now is Solana. And that's, that's been really, I think the story of 2020 usage for stable coins.
- [21:39]
Scott
Or you just mean generally because I still think more than 50% of tether is on Trump.
- [21:45]
Mario
I mean, I mean more generally. But yeah, you're probably correct about tether volume. I really hope we can start using tether a bit less because I seriously doub that they have four reserves and that's, that's probably in my top five of like big black.
- [22:01]
Scott
I think that even with cancer, Fitzgerald saying that they have full reserves and yeah, the CEO of Cantor Fitzgerald saying that he custody that for them. He's now becoming the Secretary of Commerce for the United States and is an owner, a partial owner and investor now in tether. Honestly, I think the tether fud has died.
- [22:19]
Mario
I don't care. Like I, I don't care. I don't care if Trump or like Jesus Christ says that, that, that there is a reserve. I actually want to see audit and like why hasn't there been an order? This thing is massive. Why don't you just do an audit? It's to me, that's insane. That's, that's just what I'll go back to.
- [22:39]
Scott
I personally can't imagine that at this point, Tron, that Tether is not fully backed. Especially considering just the insane amount of money that they've made simply parking in Treasuries.
- [22:49]
Mario
And that insane amount of money is also an insane temptation to take. Right, that's, that's, that's, that's the flip side of this. And it's.
- [22:56]
Scott
No, but they make more money by being fully backed and putting the money in Treasuries that literally, literally the way they make money is to have more of your cash fully backed and in short term Treasuries that they can earn 4 and 5.
- [23:09]
Rand
Good point.
- [23:09]
Scott
Yield on to make them a more profitable company than BlackRock last year.
- [23:14]
Mario
Yeah.
- [23:14]
Scott
With a tenth of the employees or a hundredth of the employees. I think ten thousand versus a hundred employees.
- [23:19]
Mario
Good point. And you know what? I'll call it 50. 50. But I'm not happy with those. Still happy.
- [23:24]
Scott
Here's what I'll say. I think that there was a time when Tether was probably not fully backed. And I would say that like many companies in crypto or exchanges that were operating at a time before the rules of the road were clear and where maybe they weren't in line with regulators, I think a lot of things happened in the past before they matured and got to the point where they're probably like Binance, for example. Right. I mean everybody knows that there were some questionable things happening at Binance through all those years. But at this point I think that with the scrutiny that Binance is now under and after having gone through the entire public process, Binance is probably one of the safest exchanges or companies in crypto on the planet. Dan, go ahead.
- [24:10]
Knoffle
Yeah, it's funny. I was at Binance during those years. I remember it quite well. I was agreeing that they don't have.
- [24:16]
Scott
Your WhatsApp or Telegram, do they, buddy?
- [24:18]
Knoffle
Sorry, I'm not allowed to not allow to comment on that, unfortunately. No, I think I agree that I would like people to use Tetherless simply. I don't, I don't think that they are not backed. I do believe that they are actually over collateralized rather than. I believe that they are over collateralized especially now. But I would like to see people use Tether less just for diversity of that because if all of the stablecoin was in one stable coin like Tether, and that was, you know, massively above all the other ones. It just creates a larger point of failure. I use USDC primarily, but just as I do think USDT is fully backed. I agree with you. There's probably a time when it wasn't and there was probably some issues there. That's perhaps why they're shying away from an audit or whatever. But I do think Tether is fully backed. I think they're overcast realized, but I would like to see a migration away from it to something just to expand it.
- [25:10]
Scott
It's funny because that was. And I love Dante and Jeremy and all the guys at usdc. I think they're doing everything right. I think that they will become sort of the de facto, you know, US stablecoin most likely. But I will say that when Silicon Val Rally bank collapsed and they had that $3 billion in SVB circle did, obviously in that brief period where people were questioning if the Fed would come in with the bailout and whether, you know, centralized stable coins that were forced or chose to use banks were safe, I flipped at that point, Bitcoin was 19,000. I flipped all my USDC into Bitcoin and it's still there. You know, I got very lucky because obviously on that day it went from 19 to 25 and I had no reason to do anything else. But I think that day did put a bit of a damper on the. On the sort of assumption that just because they were more highly regulated, that was the safer stable coin. Only because. And I've spoken with Palo Arduino a number of times about this, you know, who's obviously the CEO of Tether and Bitfinex. But I said to him, you know, what are sort of the risks to Tether? And he said, you know, in Europe with Mika, the biggest risk to Tether, in his opinion is the amount of money that he has to put into an actual bank to be compliant as a stable coin in Europe. Because you can't trust the banks like what happened with Silicon Valley Bank. And if you are forced to have too much of your cash sitting in a bank that's fractionally reserved and can become insolvent, that's actually the biggest risk to the stable coin, ironically. So sort of an interesting situation. But my feeling is that Tether is on a trajectory right now to getting approval in the United States because of Lut, Nick and Karen to Fitzgerald. I don't know if anybody disagrees, but I'd love to hear it. Perfect. Nobody Does. Hey Grant, I saw you requested and jumped on stage. Great to have you. I'm assuming it was when we were talking more heavily about Bitcoin, but would love to have your opinion. Not your Grant here. Mikkel, you jumped up as well. It's interesting talking about stablecoins right now. Obviously you're a big fan of xrp. Were always saying that this was going to happen and that it was coming inevitable. What's happened here with Ripple, interesting times with them launching their stablecoin and I guess getting approval it looks like over the past couple days. Right?
- [27:32]
Rand
Yeah. So they just are now have the first stable coin with the New York Trust license Bitlicense, which should be interesting because something that not a lot of people know is that for a long time actually Ripple made up close to a third of all minting on usdc. Likely having to do with a lot of their ODL flows and moving money across borders. So pretty quickly you probably will see pretty large volumes flowing through that rlusd Stablecoin and I think they're just looking to add another regulatory compliance for stablecoin issued out of New York, the first one with that specific license and diversify out of Circle as well. And I think more blue chip high quality stablecoins is a great thing for the market. I'm not sure necessarily where I stand on Tether yet. I think I probably disagree with you on Tether ultimately getting approval in the United States anytime soon, but I guess we'll see on that.
- [28:34]
Scott
I was 100% in your camp under the Biden administration, so I think that the chances have obviously increased massively when the announcement came recently that Lutnick himself was now an investor in Tether and he's the Department of Commerce.
- [28:52]
Rand
Yeah, I agree. I just don't know. I just don't know if there's things that they're going to require that Tether is going to not want to do. I know Tether right now isn't doing things to comply with Micah and to be honest, I don't know all the specifics there, but they clearly have in the past chosen to kind of do their own thing rather than what regulators and kind of the general crowd is asked for. So it'll just be interesting to me to see if they kind of expect the US to bend the knee to what they want to be able to do or they're going to be willing to do what the US wants to do. Because I anticipate if the US does have a stablecoin bill, it's going to be very, very stringent. And so far we just haven't seen that Tether has been that willing to comply with those things. So I think it's really more of a question of what Tether is willing to do to be able to seize the opportunity. And I think that's the big question mark for me.
- [29:43]
Scott
What if I told you that we had an ex FDIC regulator on stage who could give us his opinion of what will happen with regulation? Oh, we do. Jason, how are you, buddy?
- [29:53]
Zach
Hey, how are you? Thanks for having me. Yeah, you know, actually I will just say on the last part about the stablecoin regulation, I think, you know, we might actually see with this new administration that not that stringent of a stablecoin bill. The biggest thing I think happening on Capitol Hill right now that's interesting to me is, you know, we don't really hear a push for all the legislation that we had heard about building like Fit21 because we're in this lame duck Congress and, you know, Republicans swept the board, but the House, the Senate and now the administration. So, you know, you're right. We might see a very stringent stablecoin bill if it happens next six days that the Congress is working before they all go on holiday. But in the new administration, we might see a little more flexibility that might actually benefit Tether. I just wanted to share real quick my thoughts just in terms of the bitcoin, the price going up and some sort of the mainstream MSNBC fud. And also what we saw in Congress yesterday that may not have hit the wires yet on this show is Scott, we saw the Carolyn Crenshaw, who was very anti crypto, some people said, more anti crypto than Gary Gensler, who was slated in a sort of a Senate session, a closed door executive session of the Senate Banking Committee yesterday to be renominated until 2029. And at first with the SEC, you know, there's five commissioners, so you really just need a majority. And the Republicans are going to have a majority with Hester Pierce, Mark Ueda, and with the new coming in. So it doesn't really matter too much. But it is notable that she was more skeptical of the bitcoin ETF than even Gensler was in her descent. And so what's interesting to me now is sort of the new way of politics is the fair shake pack and stand with crypto all activated yesterday. And I mean, and a few days before when this was announced and there was actually someone hired a truck that said vote no on Crenshaw people in contacting offices. And I thought for sure the Democrats would just go through and appoint Crenshaw because Sherrod Brown's the chair and he kind of get kicked out by crypto in the last election. But they actually scuttled the vote, the vote they tried to have, not in the Senate Banking Committee itself, but later on in the day. And it turned out there was a procedural rule where if it's two hours after the Senate starts, you have to have a waiver to have this vote to re nominate Crenshaw until 2029. And sure enough, the Republicans and Tim Scott voted against that. They said, we're not going to give you a waiver. So, you know, Sherrod Brown's plan to quietly place like an anti crypto person at the SEC was dashed. And I mean it's. Scott, it's remarkable to me to see this like the power kind of crypto has in Capitol Hill that this is a typical sausage making function behind closed doors. We may not even have heard about it. But word got out that he was trying to quietly re nominate this anti crypto person who was a Democrat to the sec and now that looks like it's in jeopardy, which maybe means you get a Democrat or people have hypothesized that you can't have more than three of the five commissioners be from the same party.
- [33:12]
Justin
She could have independent.
- [33:14]
Zach
Exactly. Yeah. So I just think that yesterday, to me it wasn't a huge news item, but the fact that the chair of the Senate Banking Committee didn't go through with his vote and that there was two Democrats who had just been sworn in, Senator Kim and sorry, Senator from California who Schiff, who if you remember was. They primaried out Katie Porter who probably would have voted for this. So I mean, crypto has some muscle in D.C. that's Scott, that's just. I'm dropping the mic. It's pretty. I've never seen anything like what happened yesterday.
- [33:47]
Scott
Right. Crypto has the muscle. You're right. I think there was just an assumption that Crenshaw got pushed through that has the Elizabeth Warren, Sherrod Brown stench, stench all over it. Of course, trying to salvage something of their past anti crypto army ways. But that happened before. We even have all these incoming commissioners and legislators that are so very pro crypto. I mean, we keep saying this, but Trump's appointments, assuming they all go through, even outside of finance, every single person it seems that he's appointing in some way has been pro bitcoin or pro crypto in the past. Not even on the financial side, I mean, we all know obviously like rfk, he's not going to add Health and Human Services is not going to have much impact. But he's one of the most pro bitcoin people you could possibly find in politics. You have people like that across the board. But now talking about Brian Quinten being potentially the head of the cftc, who was there before, he's been an Andreessen doing crypto since I've interviewed him. He's great. And having Atkins, who, I mean, literally, as I said at the beginning, I mean, Paul Atkins came out and said that FTX was the fault of the United States government. The guy has been advising crypto companies very pro bitcoin and has been an SEC commissioner in the past. Show me where like this goes poorly for us from a regulatory and legislative perspective. Because I don't really see it in the same way right now. Given to be fair, we, this industry also cheered Gary Gensler when he was appointed. So we do have an example of things going wrong. But go ahead, Jason. And then Justin, I would just love. I mean it. Doesn't this all look like tailwinds?
- [35:25]
Zach
Yeah, absolutely. I can disagree with you. You can go to Justin. This is 100%. I think the one thing I would add is we don't know exactly what Atkins is going to look like, but we do know that as opposed to Gensler, that talk about it in academic sense, Atkins was involved with a token taxonomy concept back in 2019. The guy at the end of the day has a desire to set the rules so people know like how a token would be considered. I think that's to me a net positive with however he might come out, even if he ends up being a little anti crypto, he still is going to say, well, we need rules. I mean, this is something he's personally worked on for five years.
- [36:06]
Scott
And by the way, token taxonomy is incredibly important still. Right. Not something that we even have clarity on. Go ahead, Justin.
- [36:14]
Mario
Thank you. Thank you. Now I just want to echo. It's just incredible, you know, I mean, the United States is clearly going to become the haven for cryptocurrency and that's going to reverberate across the world. I mean, I'm overjoyed. It's like a. It's like a dream come true. You know, it easily could have gone another way in our history.
- [36:36]
Scott
It could go the other way. Right. I mean, we were there.
- [36:39]
Mario
Right? Right. I remember the meme where like, it's like we, you know, between Civil War and $100,000 Bitcoin, and it was just a hit movement from Trump. You know, that's, that's, that's how sometimes just history flips on a dime. And it's incredible. And, and now we have this future looking ahead of us. That's just, I mean, the US Government is just coming in on full support in crypto and it's, and it's, it's going to be, it's. I think it's going to be a golden age. I, I really do. And I really think we should, we should make the most of it and, and build, and, and really build on creating adoption and educating people and, and let's let our best on transferring some of these values because it's all inevitably going to get watered down as the masses come in. But let's still try our best to talk about some things like privacy and self sovereignty and all of these beautiful concepts that come with cryptocurrency. That's really about freedom.
- [37:40]
Scott
Jason, you're still working on policy, correct?
- [37:43]
Zach
Yes, absolutely.
- [37:45]
Scott
And so how much has your job changed in the past two months?
- [37:54]
Zach
Oh, it's completely changed. It's actually to the point where a lot of people are like, waiting to see how things shake out with Atkins coming in. We still don't know who's going to be at the cftc, but a lot of people are positive now here. Our people are engaged with the idea of setting up shop in the United States and not fearful of, you know, Gary Gensler, just one person, one bureaucrat, you know, one day suing you. Right. I mean, that's a. They always talk about how the regulatory environment, if we can get more positivity out of it, that will have a better business flow for everybody. And I think people just, the businesses don't want the risk. Like, why would you. I mean, think about it. If you're in crypto, you're already kind of a risk taker, but I mean, the risk of you going into a business knowing that any day you could get sued by a regulator. So just moving away from that concept, I think, is huge. And I think people are still, they're waiting to see how things fall out because you don't know exactly what the rules are going to be. And I think you'll see tensions. Like, to me, the tension you'll see, I think Scott, and I know this is like, like totally in your Bailey wig is like, we're going to see a lot of the meme coins and a lot of the scams kind of come out and like, whatever that last one was, the, you know, fart coin, like, I'm waiting for, like, you know, some policy debate, like, is fart coin a security? You know, and that's the kind of. That's the thing that's going to hurt us a little bit, right? Like, we don't need the meme coin mania. Because then you get to the point of the slippery slope where somebody like Atkins is there and he's like, well, how do I decide all these tokens? And everyone's bidding for, like, their token to not be a security. So I think we have to come to some recognition of what it means maybe for a crypto to be a security, what it can go to be a commodity. But it's no longer the John Reed Starks and the others of the world who are just so negative about it saying this is what's supposed to happen. I think if anything, it's a turning point. And it's also a turning point on debanking, too. So, like, two main themes would be for people looking to start tokens in the US is it's no longer. You might get sued out of the gate. And with debanking, hopefully we can put in some, some controls where it doesn't mean you automatically might lose a bank account. So I think just to be able to operate a business as like a sane business person, Scott, where you're not. And at the same time, I'd say it's, it's not a. I'm not trying to hate on meme coins, but I am going to say that that, that creates this. This where sometimes it's like, can. Can we never not have nice things as an industry?
- [40:32]
Scott
Yeah, I agree with that. Go ahead, Michael. Yeah.
- [40:37]
Rand
Two things. Well, one, on the John Reed Stark thing, I mean, I mean, it's going from people who are control. In control of the regulatory environment who absolutely just refuse to accept evidence and the obvious properties of cryptocurrency to people who are willing to understand and actually craft legislation to benefit it. I mean, John reed Stark on 60 Minutes the other day said, cryptocurrency has no utility.
- [41:04]
Scott
This is blackrock.
- [41:07]
Rand
Yes, you have blackrock. You have all these massive firms coming out and saying that the utility of public blockchains is immense. So these people just absolutely refuse to see what could not be more obvious to people who are willing to take the time to learn. On the other side of that, one of the biggest things I've noticed on the back end, talking to a lot of these big players in the cryptocurrency industry is that timelines and roadmaps are being rapidly accelerated. Like the previous speaker said, people are no longer worried about their bank account being stripped away from them. People are no longer worried about the US Government attacking them for launching a new innovative product. People are really starting to go back to those very innovative, cool ideas they had that they never thought would fly. And for me, that's very, very exciting. Rather than going into a meeting and talking with these people about all these things that could potentially get you in trouble or get you clamped down on, it's like, hey, how can we actually do this in a compliant way? And when the risk no longer is on, will I even have a bank account? It gets the discussion so much further down the road. So not only do I think the companies now are going to be so much better off, but you are going to see so many cool, new, innovative ideas that we don't even have right now because we actually have the infrastructure to allow them to happen in a way that works compliantly on the devil's advocate side.
- [42:31]
Scott
Yeah, great points, Mikkel. Jason, actual question here though. Listen, we're so excited about this regulatory shift, obviously from completely contentious government to seemingly an open door for the industry. But if you're a, if you're a builder in the United States, most of you have already left or set up shop elsewhere, you're obviously going to be incentivized to come back. Foreign companies will be incentivized to launch into the United States instead of other jurisdictions. But how much do you have to consider or handicap another regime change in four years that would erase everything and you're stuck again. Like, what if the pendulum completely swings back? Because in the state you have to. I mean, if you're being intellectually honest in the same way that we can go from the worst government for the crypto to what we will view as the best possible scenario, couldn't you go back to something similar on the other side in four to eight years and then are you stuck?
- [43:31]
Zach
Yeah, that, that's a great point. And I think that I don't think everybody is rushing to the United States. I think people are still on the sidelines, but seeing it as more favorable. It's a great point. And it goes to a little bit of what we were talking about just when I came up, Scott, about Crenshaw. Like, that's a quick win, a victory of like not having an SEC commissioner that's going to persecute the industry, maybe be re nominated. But what we need though, is we need laws in this country, in my opinion, like what Patrick Henry worked on with what was called Fit21 or financial innovation technology that works with both the SEC and the CFTC. And what we need, Scott, is laws on the books. And I think that's what will accelerate people to really come to the US because once you have the laws that lay out how the regulators are supposed to act with this industry, and then you also have this new check from the Chevron Devons case, which in the Supreme Court means regulators can't really go beyond too much what's in the law. So my big policy push the next four years is. And look, it's taken years to get any kind of legislation on the books. But under this regime, where there's the trifecta is, you know, maybe Democrats don't go along with all of it, but we build something that has a combination of, you know, consumer protection along with, you know, particularly for some of the scams. So like people think sometimes, like the one thing to be really clear and why I'm so glad you said that point, Scott, is people sometimes think, and I say this as a former regulator, that just because we have this new administration, everything means like, like they're not going to be any more like enforcement actions like Atkins is going to have enforcement actions. The deal though is to me is they're going to be the right ones. They're going to be the ones against your fart coins and other coins of the world, the mean coins. And I don't just mean the mean coins. I'm not, I'm not trying to pick on them. But I'm saying the scams, like the true frauds like the FTX like, to me, I'm very comfortable with Atkins at the sec that we're not going to have a recreation of like an SBF 2.0. So like that's the kind of thing you want to see the regulatory agencies going after. So you're right, it could go back the next.
- [45:41]
Scott
We need laws, it sounds like the, at the bottom line, like executive orders and more action by regulators that's not necessarily based on law, although that might change with Chevron is not going to do it. Like we still, at the end of the day, no matter who's appointed in all these agencies, we still need our lawmakers to pass something that's much harder to, you know, reverse.
- [46:05]
Zach
And you have a real, I would say a very good chance now odd wise of it happening within the early part of the Trump administration and over the next two years if they can get that done, because you have House, Senate, all the same party. So it's a matter of it's a very thin majority in the House. But hopefully, Scott, all the, all this money that fair shake pack, you know, put to like quote unquote, they didn't buy an election. Everyone buys elections. By the way, the whole thing on stage, 60 Minutes is ridiculous. It's the influence that they've gained is to follow up and get a law that. And the hardest part about that, Scott, is going to be for everyone in this industry to agree on what that looks like, because that means that there might be some security tokens in the world. So we have to make a few compromises and maybe a couple of sacrifices. But if we can get this law, it's no easy feat to get a law passed even when you have all the same party. That to me would signal the true everyone can feel comfortable even because then you get a Democratic commissioners come back and they're trying to enforce stuff, but there's laws they have to follow and that changes everything. Right now it's on a whim. They can just make up what is a security and go after you. So that's. Yeah, absolutely. That's what we need at this point.
- [47:18]
Scott
Yeah, I mean, we've had a number of people from the blockchain association on almost on a weekly basis and they've said to your point, that our lobbying, while very impressive, is very fractured with very different interests depending on who's doing the lobbying. So I do think there is going to be a concern there about cannibalism within our industry and what laws they want that. Listen, do you have to look too far to see what SBF was trying to push through as defi law in the United States? Right. To know that that's not what some everybody would have agreed on. So I think that the biggest challenge, thinking, listening to talk, maybe our industry actually deciding and putting the money and power behind cohesive legislation that we actually agree on because we can be pretty sure that bitcoiners aren't going to agree with the defi guys who aren't going to agree with the ripple guys who aren't going to agree with you guys. Get it? All right. Well, I think we covered everything for today. Bitcoin still looking strong, didn't die in this hour, just as it hasn't died in the past. Congratulations, everybody. We're going to obviously be back tomorrow, 10:15am Eastern Standard Time for the last show of the week. Thank you all for tuning in. Please follow all of our amazing guests. They're here because we like them. So give them a follow, and we'll see you guys tomorrow. Later.